Friday, July 22, 2016

The Cost of Doing Business

After ten years in the same location, making a name for ourselves, building up business to a point of profit and getting comfortable in our skins as book sellers; it came as a shock when the landlord in conjunction with the property management company decided to increase our rent 115% take it or leave it (they both said that it was the other entity's idea). We were also told to expect another 3-5% increase per year after that. And it looked like we would have to 'move it (the shop) or lose it'.
And so after searching for another location we eventually settled one our new one. Close to home, more space, indoor plumbing and off street parking, what could go awry? Money.
The reality of staying in business is this: you have to take in as much, if not more, money that it costs you to run your business.
We found a spot that would cost us not much more than our old (we now call it our 'old') shop a,d closed down (losing money in sales) and moved. We went from $2,000.00 a month in rent to $2,500.00 a month with an increase over the first four years until we will reach $3,000.00 a month. After paying first month and last month, we were in.
And then comes turning on the lights, the phone and computer, the internet service, the insurance, the alarm system, office supplies and the moving expenses. Well, the moving we did mostly on out own. We opened up almost immediately.
We make our own signage we do our own networking, we do everything we can to save money; but again, you have to take in money, and that is not happening at this point.
Picture it: we lose $5,000.00 in sales while we're closed, we spend a few thousand moving, we plop down five large to secure the space, pay between 3 and 6 a month for utilities, the computer and printer need replacing, we have business insurance (per lease agreement) burglar alarm system, the air conditioner blows a motor, taxes, Blue Cross, the cost of the car to keep running, inspected, gassed up and insured not to mention our living expenses. Our sales took a hit immediately; our sales dropped 70% and our expenses increased by 25% and we we're lucky. Those few months were traditionally our 'busy' months. The the slow months came and our business went down to 10% of what it should have been. Not so lucky. The question that you may ask is: well where did the money come from to keep your doors open while you worked seven days a week with no pay?